HOME FINAL RULE Summary of COMPLIANCE Changes

HOME FINAL RULE Highlights of the Changes to the 2013 HOME Final Rule  Accelerate the timely production and occupancy of assisted housing.  Strengthen the performance of PJs and their partners in producing and preserving affordable housing units.  Provide PJs with greater flexibility in the design and implementation of their programs  Increase administrative transparency and accountability.

Occupancy Requirements Risk–Based Monitoring System Income Determination Utility Allowances Rents Property Standards Inspections Financial Oversight Troubled Projects Prohibited Lease Terms Students Compliance Key Changes

Occupancy Requirements HOME rental units must achieve initial occupancy within 18 months of project completion – For units not leased within 6 months, PJ must report on current marketing efforts and, if appropriate, submit an enhanced marketing plan to HUD – If a unit has no initial occupancy within 18 months, PJ must repay HOME funds invested in that unit Effective Date: August 23, 2013

Risk-Based Monitoring ADFA will develop and follow written policies and procedures and implement a risk-based monitoring system becomes effective 12 months after publication of the Final Rule, on July 24, 2014

Income Determination Income determination provisions revised to require: – Examine at least 2 months of source documentation – Count income of ALL adult household members Effective Date: August 23, 2013

Utility Allowances Utility allowances must be determined by the following: – Using HUD Utility Schedule Model, or – Determining utility allowance for a project based on the specific utilities used at the project Utility allowances for each project must be updated annually Effective Date: August 23, 2013

Rents Clarifies that ADFA may designate more than 20% of HOME units as Low HOME Rent units Requires ADFA to annually review and approve rents for each HOME-assisted rental project – Ensures compliance with HOME rent limits – Prohibits undue rent increases from previous years Effective Date: August 23, 2013

Property Standards Rule includes significant revisions to property standards in § Effective Date: January 24, 2015 New requirements for HOME-assisted projects involving: – New Construction – Rehabilitation – Acquisition of Standard Housing – Manufactured Housing

Property Standards Uniform Physical Condition Standards, UPCS HUD Guidance will be provided

Inspections Owner must certify annually units are suitable for occupancy Required inspections: – At construction completion, and within 12 months of completion, and at least every 3 years thereafter – Projects found to have health/safety issues: ADFA will adopt a more frequent inspection schedule for problem properties

Financial Oversight ADFA will annually review financial condition of rental projects with 10 or more HOME units If a problem is identified, ADFA will take action including: – More frequent reporting and monitoring – Provide technical assistance – Assist in identifying additional non-federal funding or another appropriate owner Effective July 24, 2014

Troubled Projects New section addresses rental projects that become financially unviable during affordability period – Troubled Project = operating costs significantly exceed operating revenue HUD may approve additional HOME $$ if new + old HOME funds do not exceed current subsidy limits HUD HQ may approve reduction in number of HOME-assisted units if original number higher than minimum required

Prohibited Lease Terms A new paragraph has been added to prohibit lease terms that require tenants to accept supportive services (with the exception for residents of transitional housing) Update Leases according to the new terms ( Tenant Protections and Selection) Page 52 of the Section/Section Summary Effective Date: August 23, 2013

Students The HOME program adopts the Section 8 Housing Choice Voucher (HCV) program restrictions on student participation found at 24 CFR 5.612, which exclude any student that: 1. Is enrolled in a higher education institution 2. Is under age Is not a veteran of the U.S. military 4. Is not married 5. Does not have a dependent child(ren) 6. Is not a person with disabilities 7. Is not otherwise individually eligible, or has parents who, individually or jointly, are not eligible on the basis of income. Excluded students are prohibited from receiving any type of HOME assistance, including renting HOME-assisted rental units, receiving HOME tenant-based rental assistance, or otherwise participating in the HOME program independent of their low- or very low-income families.

Publication date of the 2013 HOME Final Rule – July 24, 2013 Requirements apply to projects to which HOME funds are committed on/after August 23, 2013 Requirements w/Delayed ImplementationEffective Date Project-specific CHDO reservationsOctober 22, 2013 (90 days after publication date). HUD will implement for all deadlines on or after January 1, Homebuyers proceduresJanuary 24, 2014 (6 months after publication date) Written policies, procedures, systemsJuly 24, 2014 (12 months after publication date) Financial oversightJuly 24, 2014 (12 months after publication date 5-year CHDO expenditure deadlineHUD will implement all deadlines on or after January 1, 2015 Property standardsJanuary 24, 2015 (18 months after publication date)

 HOME Compliance Staff Members  Susan Gardner – Compliance Manager  Tammy Hanson – Assistant Compliance Manager  Ketra Wright – Compliance Specialist  Davis Woodward – Compliance Specialist  Deanne Jennings – Compliance Specialist  Lisa Earls – WCMS Compliance Specialist  Monica Smith – Administrative Assistant